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How America Pays For College

Students and parents equally share responsibility for paying college costs

While scholarships and grants remained the number one source of funding, the contribution from students was the highest since 2011-12, and nearly equaled the contribution from parents.

​Students covered 30% of costs in 2016-17, while parents covered 31%.

35% of costs are covered by scholarships and grants.

23% of costs are covered by parent income and savings.

19% of costs are covered by student borrowing.

11% of costs are covered by student income and savings.​

8% of costs are covered by parent borrowing.

4% of costs are covered by relatives and friends.​

Nearly half of families use scholarships for college

87% percent of families who use scholarships get them from the college.

75% get scholarships from private, nonprofit, or community organizations.​

65% receive scholarships from states or local governments.

​72% of student loan borrowers use only federal loans, 5% use only private loans, and 22% use both. ​

Students expect to step up when it's time to pay back

84% of students with loans expect to be solely responsible for repaying.

21% of students feel solely responsible for repaying loans taken out by their parents

Amounts spent and attitudes vary across the country

The average amount families paid in 2017 is $23,757. ​

Northeast students are most likely to attend 4-year private colleges and paid on average $35,431.

​Students from the South are most likely to attend college in their home state and paid $20,953 on average.

Midwest students are most likely to work more hours to make college affordable and paid $21,577 on average.

Students from the West have the highest rate of part-time enrollment $19,181 paid on average.

​The Northeast region spends 70% more on college.

40% of students from the Northeast attend private four-year colleges, compared with 22% in the Midwest, 19% in the South, and 14% in the West.

Most families expect their child to go to college, but many don’t have a plan for paying

86% of families always knew their child would go to college.

Only 39% of families made a plan to pay for college.

69% of families eliminated a college from consideration due to its cost.

45% of families say cost has no relationship to quality of education.

FAFSA Completion

More families are seeking financial aid.

Submitting a FAFSA is the single most important step families can take to obtain assistance with paying for college.

It is the gateway to more than $150 billion in financial aid from the federal government, including federal student loans, grants, and work-study funds.

Many states and colleges, and some private scholarship providers, use FAFSA data to determine eligibility for aid they manage.

Over the course of 10 years, FAFSA filing rates have gradually increased to 86% of families this year, from 74% in 2008.

Choices families are making

​98% of families are taking deliberate steps to make college more affordable.

The #1 way they save on college costs is to choose an in-state school. 73% of families did this in 2017.

Students reduced their personal spending in 68% of families and parents did so in 47%.

Students increased their work hours in 50% of families and parents worked more hours in 30%.

Half of students (50%) were living at home.

47% of students who don’t live at home reduced their housing costs by adding a roommate.

One in four students (26%) enrolled in an accelerated program, and 15% reduced class hours.

One in five students (18%) changed majors to pursue a more marketable profession.

40% of families filed for education tax credits.

The majority of students—76%—worked to help pay their costs: 55% were working year-round, 15% worked only during school breaks, and 6% worked only during the school term.

Differences between borrowers and non-borrowers

Students from families who borrowed were more likely than students from families who did not borrow to:

Attend four-year private colleges (36% vs 11%)

Attend college out of state (30% vs 17%)

Attend college full time (93% vs 85%)

Live away from home (60% vs 41%)

Pursue a bachelor’s degree (76% vs 62%)

Spend more for college ($31,082 vs $17,500)

Say student loan debt is acceptable (29% vs 16%)

Plan to attend graduate school (63% vs 55%)

529 plans have stalled

​Although 529 college savings plans have been available since 1996, only a small portion of families uses them to pay for college.

13% of families used 529 plans in 2016-17, down from 16 % the prior year, and the lowest percentage in the past five years.

​Students borrow more than 70% of the money borrowed for college.

​Rising sensitivity to cost is reflected in the increase over 10 years in the proportion of families eliminating colleges from consideration because of price.

​Further, more families today than in 2008 believe that there is no relationship between the cost of attendance and the quality of education provided.

Families are increasingly seeking financial aid. The proportion of families who filed a FAFSA this year—86 percent—is 12 percentage points higher than it was in 2008. Notably, scholarship and grant contributions have grown at a faster pace over the past decade than other resources.

Factors influencing decisions about college

​1. Society: Attending college because it is the what society expects you to do. Society parents often borrow to pay for college and expect to be solely responsible for repaying loans.

2. Career: Attending college as entry into a specific profession, or to earn more money. Most believe they will need a graduate degree.​

3. Self: Attending college for social and intellectual reasons. Personal choice and financial aid play a big role in school selection. These families pay slightly more for college, but they use more scholarships and grants.

4. Community: Attending college is strongly influenced by friends, siblings, advisors, coaches, and other members of the student’s immediate community. Families in this category pay a little less for college and choose a school based on its location. They are more likely to think an undergraduate college degree is sufficient.

Source: A snapshot of the 10th national study by Sallie Mae® and Ipsos